Dish TV EGM: Bombay High Court Thwarts Attempt To Prevent Yes Bank From Voting

Dish TV's promoter entity makes a last ditch effort to bar Yes Bank from voting at June 24 EGM.

<div class="paragraphs"><p>Employees enter a Yes Bank branch at its headquarters in Mumbai, India. (Source: Reuters)</p></div>
Employees enter a Yes Bank branch at its headquarters in Mumbai, India. (Source: Reuters)

The Bombay High Court on Friday declined to grant interim relief to World Crest Advisors LLP that Yes Bank Ltd. be disallowed to vote at Dish TV India Ltd.'s extraordinary general meeting on June 24.

World Crest has not made out a prima facie case nor is the balance of convenience favouring grant of relief, the high court said. 'No irreparable harm is likely to be caused to the applicant'.

World Crest Advisors is the promoter entity of Dish TV and is locked in a dispute with Yes Bank since last year. World Crest is seeking a declaration that it is the owner of 44,00,54,852 equity shares of Dish TV which are currently held by Yes Bank in its demat account.

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World Crest had approached the Bombay High Court last week seeking to prevent Yes Bank from voting at the EGM and injunct the lender from interfering or seeking to participate in Dish TV's management.

Relying on a recent Supreme Court ruling in PTC Financial's case, World Crest had approached the Bombay High Court seeking to prevent Yes Bank from voting at the EGM in which three resolutions have been proposed:

  • Reappointment of Jawahar Goel as managing director from April 1, 2022 to March 31, 2025

  • Reappointment of Anil Dua as the whole time director from March 26, 2022 to March 25, 2025.

  • Appointment of Rajagopal Venkateish as a non-executive independent director.

World Crest argued that the apex court ruling has changed the legal landscape on rights available to a pledgee [in this case Yes Bank] once the pledge is invoked. Yes Bank had acquired Dish TV's shares after invocation of pledge subsequent to default/breach of terms of loan by the company. The bank holds 25.63% stake in the company.

Yes Bank argued that PTC Financial ruling has no bearing on its voting rights in Dish TV. And that the apex court in PTC's case was only dealing with the question of discharge of debt once the pledgee becomes the beneficial owner of pledged shares.

The apex court ruling came last month and concluded that merely because the entity which has extended the loan has become the beneficial owner of pledged shares doesn't mean the debt has been discharged.

To be clear, the Supreme Court order makes no direct conclusions on exercise of voting rights but it records at one place that after invocation of the pledge, PTC Financial had claimed several rights as per the contract with its borrower.

"Consequently, all the rights in the pledged shares, including but not limited to the right of attending general body meetings, voting rights, and rights to receive dividends and other distributions, now vests with them [PTC Financial] as per the pledge deed." – PTC Financial's letter recorded in Supreme Court order

The Bombay High Court is yet to give its verdict on the implications, if at all, of this apex court ruling on Yes Bank-Dish TV dispute. For now, since the single judge bench of Justice AK Menon has declined to grant any interim relief to World Crest, Yes Bank is all set to vote at the June 24 EGM of Dish TV.

The high court's detailed order is awaited.